How Steve Jobs Got the iPhone Into Japan

March 18, 2014 Leave a comment

How Steve Jobs Got the iPhone Into Japan

By Mark Milian – Mar 12, 2014

The iPhone, it’s safe to say, is big in Japan. Toward the end of last year, three out of every four smartphones sold in Japan were iPhones, according to market researcher Kantar Worldpanel ComTech. Tim Cook said during Apple’s most recent earnings call that its phone sales in the country shot up 40 percent after it signed a deal with NTT Docomo.

Breaking into Japan was no cheap trick. To get there, Steve Jobs took a chance on a self-made Japanese billionaire who had a crude drawing of an iPod phone and no mobile carrier to speak of. SoftBank CEO Masayoshi Son recounted how he scored the deal to become the iPhone’s exclusive carrier in Japan in a television interview with Charlie Rose that aired this week.

Two years before Apple had officially acknowledged the iPhone’s existence, Son called Jobs and arranged for a meeting. Son showed up with a rough sketch of what he thought an Apple phone should look like.

“I brought my little drawing of an iPod with mobile capabilities. I gave him my drawing, and Steve says, ‘Masa, don’t give me your drawing. I have my own,'” Son recalled during the “Charlie Rose” interview. “I said, ‘Well, I don’t need to give you my dirty paper, but once you have your own product, give me for Japan.’ And he said, ‘Masa, you are crazy.'”

The Apple co-founder had reason to be skeptical. Sure, Son had established himself as a savvy technology entrepreneur, selling two companies by the age of 19 that netted him more than $3 million. He’s also a successful investor, with a lucrative stake in Yahoo! Japan. But at the time of the meeting with Jobs, Son didn’t even control a mobile-phone company.

According to Son, Jobs said, “We have not talked to anybody, but you came to see me as the first guy. I’ll give it to you.” The negotiation continued, as Son asked that Jobs put in writing that Apple would give him exclusivity for the Japanese market. Jobs’s reply? “‘No! Masa, I’m not going to sign for you because you don’t even own a mobile carrier yet!’ And I said, ‘Well, look, Steve, you promised me. You gave me your word. I bring a carrier for Japan.'”

And he did. SoftBank spent more than $15 billion to buy Vodafone Group’s Japanese unit in 2006. Sure enough, SoftBank Mobile, then adistant third in the market, announced a deal with Apple in 2008 to carry the iPhone. It was a major coup for the company, and it started eating away market share from Docomo until it got the iPhone last September.

SoftBank Mobile is still No. 3 in Japan, but it’s extending its reach across the globe. The company spent $22 billion in July for control of Sprint, another third-place carrier, and is looking to grow further in the U.S. with a possible acquisition of T-Mobile US.

The popularity of the iPhone has forced businesses in Japan and across the globe to develop mobile strategies. The emphasis on thinking “mobile first” is a top theme this week at the CeBIT convention in Hanover, Germany.

As for Jobs, he was still thinking about the iPhone until the day he died. In a separate interview about a week after Jobs died in 2011, Son recalled meeting with Cook on the day the iPhone 4S was unveiled. Cook said he had to cut the meeting short because Jobs wanted to talk about an unannounced product, Son said. Jobs died the next day.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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